Ground feel unsteady under your feet? It might be that you’re standing at the edge of a fiscal cliff.
According to Politico, “If Congress doesn’t take action by the end of the year, a package of tax cuts adopted during George W. Bush’s administration expire while deep spending cuts kick in. If that happens, the economy would go over a ‘fiscal cliff.’” While a steep reduction in federal spending could help shrink the budget deficit, less spending also means even less stimulus to our weak and struggling economy.
Recent reports have shown Members of Congress in heated debate over the issue, but expectations are low for any resolution occurring before the November 6 elections.
As we noted in Memo to Members recently, there is another theory: it’s not a fiscal cliff, it’s a fiscal slope. According to the Center on Budget and Policy Priorities, chances are, even if a deal is not reached by the beginning of 2013, Congress is likely to work something out eventually- meaning that consumers and businesses will have enough confidence to keep spending. Democrats have shown a willingness to test that fiscal slope theory, if it means the richest 2% of Americans would pay their fair share of taxes.
Do you believe we’re at the edge of a cliff, or a slope? What action do you think Congress needs to take? Let’s talk about it in the comments.
With all the talk about the work Congress is doing to decide on next year’s appropriations for HUD and rural housing, it’s easy to forget that there is another big budget issue looming: sequestration.
As we wrote in Memo to Members in January,
The Budget Control Act of 2011 required Congress to form a bipartisan committee to develop a plan to reduce the federal deficit by $1.2 trillion over a ten-year period. The act specifies that if a bipartisan Joint Select Committee on Deficit Reduction (the Super Committee) fails to produce a plan, the $1.2 trillion will be sequestered from discretionary spending. Sequestration would make across-the-board cuts to discretionary programs to reach the $1.2 trillion goal. The committee did not reach agreement by the statutory deadline of November 2011, triggering sequestration for FY13.
The defense community and their supporters are voicing their concerns about the impact of sequester on national security. Members of both parties and in both houses of Congress seem concerned about the effects of sequestration, and steps have been taken to ask the White House to provide details of how it would carry out the across-the-board cuts.
For our part, affordable housing advocates have been sounding the alarm from the beginning. An 8.4% cut to core government functions like education and job training, public safety and law enforcement, public health, and housing and social services would be devastating to every community in the United States.
Fortunately, there is a way to take action. Every local, state, and national organization in the country that cares about funding for any of these core government functions is urged to sign onto this letter urging Congress to avoid the planned sequester and take a balanced approach to deficit reduction that does not include additional cuts to these programs. The letter argues that nondefense discretionary programs have already contributed their share to deficit reduction and the sequester must be nullified.
Want to sign your organization’s name to this letter? It’s easy. Just visit this website and add your name. But act quickly: Signatures must be received by close of business Friday, June 29.